Analyzing impact of company fundamentals on long-term stock performance in India

Abstract

Value trading has traditionally relied on limited number of factors to identify investment opportunities, like investing in companies with low P/E or high B/M, with the expectation that multiples would correct over long periods of time. However, there are many underlying operational & financial factors that impact the earnings of the company and can act as indicators about the quality of earnings and also potentially separate long term winners from losers.